Consulting Services for the Preparation of Detailed Architectural and Engineering Design for the Replication of the Philippine

Navy Facilities
General Conditions of the Contract

1. Definitions

1.1 Unless the context otherwise requires, the following terms whenever used in this
Contract have the following meanings:

(a) “Applicable Law” means the laws and any other instruments having the
force of law in the Philippines as they may be issued and enforced from
time to time.

(b) “Consultant” refers to the short listed consultant with the HRRB
determined by the Procuring Entity as such in accordance with the ITB.

(c) “Consulting Services” refer to services for Infrastructure Projects and

other types of projects or activities of the Government of the Philippines
(GoP) requiring adequate external technical and professional expertise
that are beyond the capability and/or capacity of the Procuring Entity to
undertake such as, but not limited to: (i) advisory and review services;
(ii) pre-investment or feasibility studies; (iii) design; (iv) construction
supervision; (v) management and related services; and (vi) other
technical services or special studies.

(d) “Contract” means the agreement signed by the Parties, to which these
General Conditions of Contract (GCC) and other sections of the Bidding
Documents are attached.

(e) “Effective Date” means the date on which this Contract comes into full
force and effect.

(f) “Foreign Currency” means any currency other than the currency of the
Philippines.

(g) “Funding Source” means the entity indicated in the SCC.

(h) “GCC” means these General Conditions of Contract.

(i) “Government” means the Government of the Philippines (GoP).

(j) “Local Currency” means the Philippine Peso (Php).

(k) “Member,” in case the Consultant is a Joint Venture (JV) of two (2) or
more entities, means any of these entities; and “Members” means all
these entities.

(l) “Party” means the Procuring Entity or the Consultant, as the case may be,
and “Parties” means both of them.

(m) “Personnel” means persons hired by the Consultant or by any

Subconsultant as employees and assigned to the performance of the
Services or any part thereof; “Foreign Personnel” means such persons
who at the time of being so hired had their domicile outside the
Government’s country; “Local Personnel” means such persons who at the
time of being so hired had their domicile inside the Philippines; and “Key
Personnel” means the Personnel referred to in GCC Clause 39.
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General Conditions of the Contract

(n) “Procuring Entity” refers to any branch, constitutional commission or

office, agency, department, bureau, office or instrumentality of the
Government, including GOCC, GFI, SUC, LGU, and autonomous regional
government procuring Goods, Consulting Services, and Infrastructure
Projects.

(o) “SCC” means the Special Conditions of Contract by which the GCC may be
amended or supplemented.

(p) “Services” means the work to be performed by the Consultant pursuant

to this Contract, as described in Appendix I.

(q) “Subconsultant” means any person or entity to whom/which the

Consultant subcontracts any part of the Services in accordance with the
provisions of GCC Clause 50.

(r) “Third Party” means any person or entity other than the Government, the
Procuring Entity, the Consultant or a Subconsultant.

2. Headings

The headings shall not limit, alter or affect the meaning of this Contract.

3. Location

The Services shall be performed at such locations as are specified in Appendix I and,
where the location of a particular task is not so specified, at such locations, whether in
the Philippines or elsewhere, as the Procuring Entity may approve.

4. Law Governing Contract and Services

4.1 This Contract, its meaning and interpretation, and the relation between the
Parties shall be governed by the Applicable Law.

4.2 The Consultant shall perform the Services in accordance with the Applicable Law
and shall take all practicable steps to ensure that any Subconsultant, as well as
the Personnel of the Consultant and any Subconsultant, complies with the
Applicable Law. The Procuring Entity shall notify the Consultant in writing of
relevant local customs, and the Consultant shall, after such notification, respect
such customs.

4.3 If, after the date of this Contract, there is any change in the Applicable Law with
respect to taxes and duties which increases or decreases the cost incurred by the
Consultant in performing the Services, then the remuneration and reimbursable
expenses otherwise payable to the Consultant under this Contract shall be
increased or decreased on a no loss-no gain basis, and corresponding
adjustments shall be made to the ceiling amounts specified in GCC Clause 52,
provided that the cost is within the Approved Budget for the Contract (ABC).

5. Language

This Contract has been executed in the English language, which shall be the binding and
controlling language for all matters relating to the meaning or interpretation of this
Contract.
Consulting Services for the Preparation of Detailed Architectural and Engineering Design for the Replication of the Philippine Navy Facilities
General Conditions of the Contract

6. Consultants and Affiliates Not to Engage in Certain Activities

6.1 The Consultant agrees that, during the term of this Contract and after its
termination, the Consultant and any entity affiliated with the Consultant, as well
as any Subconsultant and any entity affiliated with such Subconsultant, shall be
disqualified from providing goods, works, or consulting services for any project
resulting from or closely related to this Contract other than the Services and any
continuation thereof provided there is no current or future conflict.

6.2 The Consultant shall not engage, and shall cause their Personnel as well as their
Subconsultants and their Personnel not to engage, either directly or indirectly, in
any of the following activities:

(a) during the term of this Contract, any business or professional activities in
the Government’s country which would conflict with the activities
assigned to them under this Contract; and

(b) after the termination of this Contract, such other activities as may be
specified in the SCC.

7. Authority of Member in Charge

In case the Consultant is a JV, the Members hereby authorize the entity specified in the
SCC to act on their behalf in exercising all the Consultant’s rights and obligations
towards the Procuring Entity under this Contract, including without limitation the
receiving of instructions and payments from the Procuring Entity.

8. Resident Project Manager

If required by the SCC, the Consultant shall ensure that at all times during the
Consultant’s performance of the Services in the Government’s country, a resident project
manager, acceptable to the Procuring Entity, shall take charge of the performance of such
Services.

9. Entire Agreement

This Contract, including the documents specified in Section 37.2.3 of the IRR of RA 9184,
contains all covenants, stipulations and provisions agreed by the Parties. No agent or
representative of either Party has authority to make any statement, representation,
promise, or agreement not set forth herein of which the Parties shall not be bound by or
be liable for.

10. Modification

Unless otherwise specified in the SCC, no modification of the terms and conditions of
this Contract, including any modification of the scope of the Services shall be allowed.
Pursuant to GCC Clause 14 hereof, however, each Party shall give due consideration to
any proposal for modification made by the other Party.

11. Relationship of Parties

11.1 Nothing contained herein shall be construed as establishing a relation of

employer and employee or of principal and agent as between the Procuring
Entity and the Consultant. The Consultant, subject to this Contract, has complete
Consulting Services for the Preparation of Detailed Architectural and Engineering Design for the Replication of the Philippine Navy Facilities
General Conditions of the Contract

charge of its Personnel and Subconsultants, if any, performing the Services and
shall be fully responsible for the Services performed by them or on their behalf
hereunder.

11.2 The Consultant shall during the performance of the Services be an independent
contractor, retaining complete control over its Personnel, conforming to all
statutory requirements with respect to all its employees, and providing all
appropriate employee benefits.

12. Authorized Representatives

Any action required or permitted to be taken, and any document required or permitted
to be executed, under this Contract by the Procuring Entity or the Consultant may be
taken or executed by the officials specified in the SCC.

13. Good Faith

The Parties undertake to act in good faith with respect to each other’s rights under this
Contract and to adopt all reasonable measures to ensure the realization of the objectives
of this Contract.

14. Operation of the Contract

The Parties recognize that it is impractical for this Contract to provide for every
contingency which may arise during the life of this Contract, and the Parties hereby
agree that it is their intention that this Contract shall operate fairly as between them,
and without detriment to the interest of either of them; and that, if during the term of
this Contract either Party believes that this Contract is operating unfairly, the Parties
shall use their best efforts to agree on such action as may be necessary to remove the
cause or causes of such unfairness, but no failure to agree on any action pursuant to this
Clause shall give rise to a dispute subject to arbitration in accordance with GCC Clause
34 hereof.

15. Notices

15.1 Any notice, request or consent required or permitted to be given or made

pursuant to this Contract shall be in writing. Any such notice, request or consent
shall be deemed to have been given or made when received by the concerned
party, either in person or through an authorized representative of the Party to
whom the communication is addressed, or when sent by registered mail, telex,
telegram or facsimile to such Party at the address specified in the SCC.

15.2 Notice shall be deemed to be effective as specified in the SCC.

15.3 A Party may change its address for notice hereunder by giving the other Party
notice of such change pursuant to the provisions listed in the SCC with respect to
GCC Clause 15.2.

16. Warranty as to Eligibility

16.1 The Consultant represents, warrants, and confirms that it, as well as its
Subconsultant, if any, is eligible, i.e., has the legal personality to act as a
consultant in accordance with Part I, Section II. Eligibility Documents issued for
this project.
Consulting Services for the Preparation of Detailed Architectural and Engineering Design for the Replication of the Philippine Navy Facilities
General Conditions of the Contract

16.2 The Consultant shall fulfill its obligations under this Contract by using
knowledge according to the best accepted professional standards. The
Consultant shall exercise all reasonable skill, care and diligence in the discharge
of duties agreed to be performed and shall work in the best interest of the GoP.

17. Confidentiality

Except with the prior written consent of the Procuring Entity, the Consultant and the
Personnel shall not at any time communicate to any person or entity any confidential
information acquired in the course of the Services, nor shall the Consultant and the
Personnel make public the recommendations formulated in the course of, or as a result
of, the Services. For purposes of this clause, “confidential information” means any
information or knowledge acquired by the Consultant and/or its Personnel arising out
of, or in connection with, the performance of the Services under this Contract that is not
otherwise available to the public.

18. Payment

18.1 In consideration of the Services performed by the Consultant under this

Contract, the Procuring Entity shall make to the Consultant such payments and
in such manner as is provided by GCC Clause 53 of this Contract. However, the
Procuring Entity may refuse to make payments when the terms and conditions of
the contract are not satisfactorily performed by the Consultant.

18.2 Subject to the ceilings specified in GCC Clause 52 hereof, the Procuring Entity
shall pay to the Consultant: (i) remuneration as set forth in GCC Clause 53.2; and
(ii) reimbursable expenditures as set forth in GCC Clause 53.4. Said
remuneration shall not be subject to price adjustment.

18.3 All payments under this Contract shall be made to the account of the Consultant
specified in the SCC.

19. Currency of Payment

Unless otherwise specified in the SCC, all payments shall be made in Philippine Pesos.

20. Liability of the Consultant

Subject to additional provisions, if any, set forth in the SCC, the Consultant’s liability
under this Contract shall be as provided by the laws of the Republic of the Philippines.

21. Insurance to be Taken Out by the Consultant

21.1 The Consultant, at its own cost, shall be responsible for taking out or
maintaining any insurance policy against any risk related to the project.

21.2 The Procuring Entity undertakes no responsibility in respect of life, health,

accident, travel or any other insurance coverage for the Personnel or for the
dependents of any such Personnel.
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General Conditions of the Contract

22. Effectivity of Contract

The contract effectivity date shall be the date of contract signing, provided that the
effectiveness of the conditions, if any, listed in the SCC have been met.

23. Commencement of Services

The Consultant shall begin carrying out the Services starting from the effectivity date of
this Contract, as mentioned in GCC Clause 22.

24. Expiration of Contract

Unless sooner terminated pursuant to GCC Clauses 27 or 28 hereof, this Contract shall
terminate at the end of such time period after the effectivity date as shall be specified in
the SCC.

25. Force Majeure

25.1 For purposes of this Contract the terms “force majeure” and “fortuitous event”
may be used interchangeably. In this regard, a fortuitous event or force majeure
shall be interpreted to mean an event which the Consultant could not have
foreseen, or which though foreseen, was inevitable. It shall not include ordinary
unfavorable weather conditions; and any other cause the effects of which could
have been avoided with the exercise of reasonable diligence by the Consultant.

25.2 The failure of a Party to fulfill any of its obligations hereunder shall not be
considered to be a breach of, or default under, this Contract insofar as such
inability arises from an event of force majeure, provided that the Party affected
by such an event has taken all reasonable precautions, due care and reasonable
alternative measures, all with the objective of carrying out the terms and
conditions of this Contract.

25.3 Unless otherwise agreed herein, force majeure shall not include:

(a) any event which is caused by the negligence or intentional action of a

Party or such Party’s Subconsultants or agents or employees;

(b) any event which a diligent Party could reasonably have been expected to
both take into account at the time of the conclusion of this Contract and
avoid or overcome in the carrying out of its obligations hereunder;

(c) insufficiency of funds or failure to make any payment required

hereunder; or

(d) the Procuring Entity’s failure to review, approve or reject the outputs of
the Consultant beyond a reasonable time period.

25.4 A Party affected by an event of force majeure shall take all reasonable measures
to remove such Party’s inability to fulfill its obligations hereunder immediately
or within a reasonable time.

25.5 A Party affected by an event of force majeure shall notify the other Party of such
event as soon as possible, and in any event not later than fifteen (15) days
following the occurrence of such event, providing evidence of the nature and
Consulting Services for the Preparation of Detailed Architectural and Engineering Design for the Replication of the Philippine Navy Facilities
General Conditions of the Contract

cause of such event, and shall similarly give notice of the restoration of normal
conditions as soon as possible.

25.6 The Parties shall take all reasonable measures to minimize the consequences of
any event of force majeure.

25.7 Any period within which a Party shall, pursuant to this Contract, complete any
action or task, shall be extended for a period equal to the time during which such
Party was unable to perform such action as a direct and proximate result of force
majeure.

25.8 During the period of their inability to perform the Services as a direct and
proximate result of an event of force majeure, the Consultant shall be entitled to
continue receiving payment under the terms of this Contract as well as to be
reimbursed for additional costs reasonably and necessarily incurred by it during
such period for the purposes of the Services and in reactivating the Services after
the end of such period, provided that such costs are still within the total contract
price. However, the foregoing provision shall not apply if the Procuring Entity
suspends or terminates this Contract in writing, notice thereof duly received by
the Consultant, pursuant to GCC Clauses 26 and 27 hereof with the exception of
the direct and proximate result of force majeure.

25.9 Not later than fifteen (15) days after the Consultant, as the direct and proximate
result of an event of force majeure, has become unable to perform a material
portion of the Services, the Parties shall consult with each other with a view to
agreeing on appropriate measures considering the circumstances.

25.10 In the case of disagreement between the parties as to the existence, or extent of
force majeure, the matter shall be submitted to arbitration in accordance with
GCC Clause 34 hereof.

26. Suspension

26.1 The Procuring Entity shall, by written notice of suspension to the Consultant,
suspend all payments to the Consultant hereunder if the Consultant fail to
perform any of their obligations due to their own fault or due to force majeure or
other circumstances beyond the control of either party (e.g. suspension of civil
works being supervised by the consultant) under this Contract, including the
carrying out of the Services, provided that such notice of suspension:

(a) shall specify the nature of the failure; and

(b) shall request the Consultant to remedy such failure within a

period not exceeding thirty (30) days after receipt by the Consultant of
such notice of suspension.

26.2 The Consultant may, without prejudice to its right to terminate this Contract
pursuant to GCC Clause 28, by written notice of suspension, suspend the Services
if the Procuring Entity fails to perform any of its obligations which are critical to
the delivery of the Consultant’s services such as, non-payment of any money due
the Consultant within forty-five (45) days after receiving notice from the
Consultant that such payment is overdue.

27. Termination by the Procuring Entity

Consulting Services for the Preparation of Detailed Architectural and Engineering Design for the Replication of the Philippine Navy Facilities
General Conditions of the Contract

27.1 The Procuring Entity shall terminate this Contract when any of the following
conditions attends its implementation:

(a) Outside of force majeure, the Consultant fails to deliver or

perform the Outputs and Deliverables within the period(s) specified in
the Contract, or within any extension thereof granted by the Procuring
Entity pursuant to a request made by the Consultant prior to the delay;

(b) As a result of force majeure, the Consultant is unable to deliver or

perform a material portion of the Outputs and Deliverables for a period
of not less than sixty (60) calendar days after the Consultant’s receipt of
the notice from the Procuring Entity stating that the circumstance of
force majeure is deemed to have ceased;

(c) In whole or in part, at any time for its convenience, the HoPE may
terminate the Contract for its convenience if he has determined the
existence of conditions that make Project Implementation economically,
financially or technically impractical and/or unnecessary, such as, but
not limited to, fortuitous event(s) or changes in law and National
Government policies;

(d) If the Consultant is declared bankrupt or insolvent as determined

with finality by a court of competent jurisdiction; in which event,
termination will be without compensation to the Consultant, provided
that such termination will not prejudice or affect any right of action or
remedy which has accrued or will accrue thereafter to the Procuring
Entity and/or the Consultant;

(e) In case it is determined prima facie that the Consultant has

engaged, before or during the implementation of this Contract, in
unlawful deeds and behaviors relative to contract acquisition and
implementation, such as, but not limited to, the following: corrupt,
fraudulent, collusive, coercive, and obstructive practices; drawing up or
using forged documents; using adulterated materials, means or methods,
or engaging in production contrary to rules of science or the trade; and
any other act analogous to the foregoing. For purposes of this clause,
corrupt, fraudulent, collusive, coercive, and obstructive practices shall
have the same meaning as that provided in ITB Clause 3.1(a):

(f) The Consultant fails to remedy a failure in the performance of

their obligations hereunder, as specified in a notice of suspension
pursuant to GCC Clause 15.2 hereinabove, within thirty (30) days of
receipt of such notice of suspension or within such further period as the
Procuring Entity may have subsequently approved in writing;

(g) The Consultant’s failure to comply with any final decision

reached as a result of arbitration proceedings pursuant to GCC Clause 34
hereof; or

(h) The Consultant fails to perform any other obligation under the
Contract.
Consulting Services for the Preparation of Detailed Architectural and Engineering Design for the Replication of the Philippine Navy Facilities
General Conditions of the Contract

27.2 In case of termination, written notice shall be understood to mean fifteen (15)
days for short term contracts, i.e., four (4) months or less, and thirty (30) days
for long term contracts.

28. Termination by the Consultant

The Consultant must serve a written notice to the Procuring Entity of its intention to
terminate this Contract at least thirty (30) calendar days before its intended
termination. This Contract is deemed terminated if no action has been taken by the
Procuring Entity with regard to such written notice within thirty (30) calendar days
after the receipt thereof by the Procuring Entity. The Consultant may terminate this
Contract through any of the following events:

(a) The Procuring Entity is in material breach of its obligations

pursuant to this Contract and has not remedied the same within sixty (60)
calendar days following its receipt of the Consultant’s notice specifying such
breach;

(b) The Procuring Entity’s failure to comply with any final decision
reached as a result of arbitration pursuant to GCC Clause 34 hereof

(c) As the direct and proximate result of force majeure, the

Consultant is unable to perform a material portion of the Services for a period of
not less than sixty (60) days; or

(d) The Procuring Entity fails to pay any money due to the Consultant
pursuant to this Contract and not subject to dispute pursuant to GCC Clause 32
hereof within eighty four (84) days after receiving written notice from the
Consultant that such payment is overdue.

29. Procedures for Termination of Contracts

The following provisions shall govern the procedures for the termination of this
Contract:

(a) Upon receipt of a written report of acts or causes which may constitute
ground(s) for termination as aforementioned, or upon its own initiative, the
Procuring Entity shall, within a period of seven (7) calendar days, verify the
existence of such ground(s) and cause the execution of a Verified Report, with all
relevant evidence attached;

(b) Upon recommendation by the Procuring Entity, the HoPE shall terminate
this Contract only by a written notice to the Consultant conveying such
termination. The notice shall state:

(i) that the contract is being terminated for any of the ground(s) afore-
mentioned, and a statement of the acts that constitute the ground(s)
constituting the same;

(ii) the extent of termination, whether in whole or in part;

(iii) an instruction to the Consultant to show cause as to why the contract

should not be terminated; and
Consulting Services for the Preparation of Detailed Architectural and Engineering Design for the Replication of the Philippine Navy Facilities
General Conditions of the Contract

(iv) special instructions of the Procuring Entity, if any.

The Notice to Terminate shall be accompanied by a copy of the Verified Report;

(c) Within a period of seven (7) calendar days from receipt of the Notice of
Termination, the Consultant shall submit to the HoPE a verified position paper
stating why this Contract should not be terminated. If the Consultant fails to
show cause after the lapse of the seven (7) day period, either by inaction or by
default, the HoPE shall issue an order terminating this Contract;

(d) The Procuring Entity may, at anytime before receipt of the Consultant’s
verified position paper to withdraw the Notice to Terminate if it is determined
that certain services subject of the notice had been completed or performed
before the Consultant’s receipt of the notice;

(e) Within a non-extendible period of ten (10) calendar days from receipt of
the verified position paper, the HoPE shall decide whether or not to terminate
this Contract. It shall serve a written notice to the Consultant of its decision and,
unless otherwise provided, this Contract is deemed terminated from receipt of
the Consultant of the notice of decision. The termination shall only be based on
the ground(s) stated in the Notice to Terminate; and

(f) The HoPE may create a Contract Termination Review Committee (CTRC)
to assist him in the discharge of this function. All decisions recommended by the
CTRC shall be subject to the approval of the HoPE.

30. Cessation of Services

Upon termination of this Contract by notice of either Party to the other pursuant to GCC
Clauses 27 or 28 hereof, the Consultant shall, immediately upon dispatch or receipt of
such notice, take all necessary steps to bring the Services to a close in a prompt and
orderly manner and shall make every reasonable effort to keep expenditures for this
purpose to a minimum. With respect to documents prepared by the Consultant and
equipment and materials furnished by the Procuring Entity, the Consultant shall proceed
as provided, respectively, by GCC Clauses 35 or 36 hereof.

31. Payment Upon Termination

Upon termination of this Contract pursuant to GCC Clauses 27 or 28 hereof, the

Procuring Entity shall make the following payments to the Consultant:

(a) remuneration pursuant to GCC Clause 53 hereof for Services satisfactorily

performed prior to the effective date of termination;

(b) reimbursable expenditures pursuant to GCC Clause 53 hereof for expenditures

actually incurred prior to the effective date of termination; and

(c) in the case of termination pursuant to GCC Clause 27(b) hereof, reimbursement
of any reasonable cost incident to the prompt and orderly termination of this
Contract including the cost of the return travel of the Personnel and their eligible
dependents.
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General Conditions of the Contract

32. Disputes about Events of Termination

If either Party disputes whether an event specified in GCC Clause 27.1 or in GCC Clause
28 hereof has occurred, such Party may refer the matter to arbitration pursuant to GCC
Clause 34 hereof, and this Contract shall not be terminated on account of such event
except in accordance with the terms of any resulting arbitral award.

33. Cessation of Rights and Obligations

Upon termination of this Contract pursuant to GCC Clauses 27 or 28 hereof, or upon

expiration of this Contract pursuant to GCC Clause 24, all rights and obligations of the
Parties hereunder shall cease, except:

(a) such rights and obligations as may have accrued on the date of
termination or expiration;

(b) the obligation of confidentiality set forth in GCC Clause 17 hereof; and

(c) the Consultant’s obligation to permit inspection, copying and auditing of

their accounts and records set forth in GCC Clauses 51(b) and 51(c) hereof, any
right which a Party may have under the Applicable Law.

34. Dispute Settlement

34.1 If any dispute or difference of any kind whatsoever shall arise between the
Parties in connection with the implementation of this Contract, the Parties shall
make every effort to resolve amicably such dispute or difference by mutual
consultation.

34.2 Any and all disputes arising from the implementation of this Contract shall be
submitted to arbitration in accordance with the rules of procedure specified in
the SCC.

35. Documents Prepared by the Consultant and Software Developed to be the

Property of the Procuring Entity

35.1 All plans, drawings, specifications, designs, reports, other documents and
software prepared by the Consultant for the Procuring Entity under this Contract
shall become and remain the property of the Procuring Entity, and the
Consultant shall, prior to termination or expiration of this Contract, deliver all
such documents to the Procuring Entity, together with a detailed inventory
thereof. The Consultant may retain a copy of such documents and software. The
plans, drawings, specifications, designs, reports, other documents and software,
including restrictions on future use of such documents and software, if any, shall
be specified in the SCC.

35.2 All computer programs developed by the Consultant under this Contract shall be
the sole and exclusive property of the Procuring Entity; provided, however, that
the Consultant may use such programs for its own use with prior written
approval of the Procuring Entity. If license agreements are necessary or
appropriate between the Consultant and third parties for purposes of
development of any such computer programs, the Consultant shall obtain the
Procuring Entity’s prior written approval to such agreements. In such cases, the
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General Conditions of the Contract

Procuring Entity shall be entitled at its discretion to require recovering the

expenses related to the development of the program(s) concerned.

36. Equipment and Materials Furnished by the Procuring Entity

Equipment and materials made available to the Consultant by the Procuring Entity, or
purchased by the Consultant with funds provided by the Procuring Entity, shall be the
property of the Procuring Entity and shall be marked accordingly. Upon termination or
expiration of this Contract, the Consultant shall make available to the Procuring Entity
an inventory of such equipment and materials and shall dispose of such equipment and
materials in accordance with the Procuring Entity’s instructions. While in possession of
such equipment and materials, the Consultant, unless otherwise instructed by the
Procuring Entity in writing, shall insure it at the expense of the Procuring Entity in an
amount equal to their full replacement value.

37. Services, Facilities and Property of the Procuring Entity

The Procuring Entity shall make available to the Consultant and the Personnel, for the
purposes of the Services and free of any charge, the services, facilities and property
described in Appendix V at the terms and in the manner specified in said appendix,
provided that if such services, facilities and property shall not be made available to the
Consultant as and when so specified, the Parties shall agree on:

(a) any time extension that it may be appropriate to grant to the Consultant for the
performance of the Services;

(b) the manner in which the Consultant shall procure any such services, facilities
and property from other sources; and

(c) the additional payments, if any, to be made to the Consultant as a result thereof
pursuant to GCC Clause 52 hereinafter which should be within the agreed
contract ceiling.

38. Consultant’s Actions Requiring Procuring Entity’s Prior Approval

The Consultant shall obtain the Procuring Entity’s prior approval in writing before
taking any of the following actions:

(a) appointing such members of the Personnel as are listed in Appendix III merely
by title but not by name;

(d) entering into a subcontract for the performance of any part of the
Services, it being understood that:

(i) the selection of the Subconsultant and the terms and conditions
of the subcontract shall have been approved in writing by the Procuring
Entity prior to the execution of the subcontract; and

(ii) the Consultant shall remain fully liable for the performance of the
Services by the Subconsultant and its Personnel pursuant to this
Contract;
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(e) replacement, during the performance of the contract for any reason, of
any Personnel as listed in Appendix III of this Contract requiring the Procuring
Entity’s prior approval; and

(f) any other action that may be specified in the SCC.

39. Personnel

39.1 The Consultant shall employ and provide such qualified and experienced
Personnel and Subconsultants as are required to carry out the Services.

39.2 The title, agreed job description, minimum qualification and estimated period of
engagement in the carrying out of the Services of each of the Consultant’s Key
Personnel are described in Appendix III.

39.3 The Key Personnel and Subconsultants listed by title as well as by name in
Appendix III are hereby approved by the Procuring Entity. In respect of other
Key Personnel which the Consultant proposes to use in the carrying out of the
Services, the Consultant shall submit to the Procuring Entity for review and
approval a copy of their biographical data and, in the case of Key Personnel to be
assigned within the GoP, a copy of a satisfactory medical certificate attached as
part of Appendix III. If the Procuring Entity does not object in writing; or if it
objects in writing but fails to state the reasons for such objection, within twenty-
one (21) calendar days from the date of receipt of such biographical data and, if
applicable, such certificate, the Key Personnel concerned shall be deemed to
have been approved by the Procuring Entity.

39.4 The Procuring Entity may request the Consultants to perform additional services
not covered by the original scope of work but are determined by the Procuring
Entity to be critical for the satisfactory completion of the Services, subject to GCC
Clause 55.6.

39.5 No changes shall be made in the Key Personnel, except for justifiable reasons as
may be determined by the Procuring Entity, as indicated in the SCC, and only
upon prior approval of the Procuring Entity. If it becomes justifiable and
necessary to replace any of the Personnel, the Consultant shall forthwith provide
as a replacement a person of equivalent or better qualifications. If the Consultant
introduces changes in Key Personnel for reasons other than those mentioned in
the SCC, the Consultant shall be liable for the imposition of damages as described
in the SCC.

39.6 Any of the Personnel provided as a replacement under GCC Clauses 39.5 and
39.7, the rate of remuneration applicable to such person as well as any
reimbursable expenditures the Consultant may wish to claim as a result of such
replacement, shall be subject to the prior written approval by the Procuring
Entity. Except as the Procuring Entity may otherwise agree, the Consultant shall
bear all additional travel and other costs arising out of or incidental to any
removal and/or replacement, and the remuneration to be paid for any of the
Personnel provided as a replacement shall not exceed the remuneration which
would have been payable to the Personnel replaced.

39.7 If the Procuring Entity finds that any of the Personnel has committed serious
misconduct or has been charged with having committed a criminal action as
defined in the Applicable Law, or has reasonable cause to be dissatisfied with the
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performance of any of the Personnel, then the Consultant shall, at the Procuring
Entity’s written request specifying the grounds therefore, forthwith provide as a
replacement a person with qualifications and experience acceptable to the
Procuring Entity.

40. Working Hours, Overtime, Leave, etc.

40.1 Working hours and holidays for Key Personnel are set forth in Appendix III. Any
travel time prior to and after contract implementation shall not be considered as
part of the working hours.

40.2 The Key Personnel shall not be entitled to claim payment for overtime work, sick
leave, or vacation leave from the Procuring Entity since these items are already
covered by the Consultant’s remuneration. All leaves to be allowed to the
Personnel are included in the staff-months of service set forth in Appendix III.
Taking of leave by any Personnel should not delay the progress and adequate
supervision of the Services.

40.3 If required to comply with the provisions of GCC Clause 43.1 hereof, adjustments
with respect to the estimated periods of engagement of Key Personnel set forth
in Appendix III may be made by the Consultant by prior written notice to the
Procuring Entity, provided that:

(a) such adjustments shall not alter the originally estimated period of
engagement of any individual by more than ten percent (10%); and

(b) the aggregate of such adjustments shall not cause payments under this
Contract to exceed the ceilings set forth in GCC Clause 52.1 of this
Contract. Any other such adjustments shall only be made with the
Procuring Entity’s prior written approval.

41. Counterpart Personnel

41.1 If so provided in Appendix III hereto, the Procuring Entity shall make available to
the Consultant, as and when provided in such Appendix III, and free of charge,
such Counterpart Personnel to be selected by the Procuring Entity, with the
Consultant’s advice, as shall be specified in such Appendix III. Counterpart
Personnel shall work with the Consultant. If any member of the Counterpart
Personnel fails to perform adequately any work assigned to such member by the
Consultant which is consistent with the position occupied by such member, the
Consultant may request the replacement of such member, and the Procuring
Entity shall not unreasonably refuse to act upon such request.

41.2 The responsibilities of the Counterpart Personnel shall be specified in Appendix

III, attached hereto, and the Counterpart Personnel shall not perform any work
beyond the said responsibilities.

41.3 If Counterpart Personnel are not provided by the Procuring Entity to the
Consultant as and when specified in Appendix III, and or if the Counterpart
Personnel lack the necessary training, experience or authority to effectively
undertake their responsibilities, the Procuring Entity and the Consultant shall
agree on how the affected part of the Services shall be carried out, and the
additional payments, if any, to be made by the Procuring Entity to the Consultant
as a result thereof pursuant to GCC Clause 52 hereof.
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42. Performance Security

42.1 Unless otherwise specified in the SCC, within ten (10) calendar days from receipt
of the Notice of Award from the Procuring Entity but in no case later than the
signing of the contract by both parties, the Consultant shall furnish the
performance security in any the forms prescribed in the ITB Clause 32.2.

42.2 The performance security posted in favor of the Procuring Entity shall be
forfeited in the event it is established that the Consultant is in default in any of its
obligations under the contract.

42.3 The performance security shall remain valid until issuance by the Procuring
Entity of the Certificate of Final Acceptance.

42.4 The performance security may be released by the Procuring Entity and returned
to the Consultant after the issuance of the Certificate of Final Acceptance subject
to the following conditions:

(a) There are no pending claims against the Consultant or the surety
company filed by the Procuring Entity;

(b) The Consultant has no pending claims for labor and materials filed
against it; and

(c) Other terms specified in the SCC.

42.5 In case of a reduction of the contract value, the Procuring Entity shall allow a
proportional reduction in the original performance security, provided that any
such reduction is more than ten percent (10%) and that the aggregate of such
reductions is not more than fifty percent (50%) of the original performance
security.

43. Standard of Performance

43.1 The Consultant shall perform the Services and carry out their obligations
hereunder with all due diligence, efficiency and economy, in accordance with
generally accepted professional techniques and practices, and shall observe
sound management practices, and employ appropriate advanced technology and
safe and effective equipment, machinery, materials and methods.

43.2 The Consultant shall always act, in respect of any matter relating to this Contract
or to the Services, as faithful advisers to the Procuring Entity, and shall at all
times support and safeguard the Procuring Entity’s legitimate interests in any
dealings with Subconsultants or third parties.

43.3 The Consultant shall furnish to the Procuring Entity such information related to
the Services as the Procuring Entity may from time to time reasonably request.

43.4 The Consultant shall at all times cooperate and coordinate with the Procuring
Entity with respect to the carrying out of its obligations under this Contract.

44. Consultant Not to Benefit from Commissions, Discounts, etc.

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The remuneration of the Consultant pursuant to GCC Clause 53 hereof shall constitute
the Consultant’s sole remuneration in connection with this Contract or the Services and,
subject to GCC Clause 45 hereof, the Consultant shall not accept for their own benefit
any trade commission, discount or similar payment in connection with activities
pursuant to this Contract or to the Services or in the discharge of their obligations
hereunder, and the Consultant shall use its best efforts to ensure that any
Subconsultants, as well as the Personnel and agents of either of them, similarly shall not
receive any such additional remuneration.

45. Procurement by the Consultant

If the Consultant, as part of the Services, has the responsibility of advising or procuring
goods, works or services, for the Procuring Entity, the Consultant shall comply with any
applicable procurement guidelines of the Funding Source, and shall at all times exercise
such responsibility in the best interest of the Procuring Entity. Any discounts or
advantages obtained by the Consultant in the exercise of such procurement
responsibility shall be for the benefit of the Procuring Entity.

46. Specifications and Designs

46.1 The Consultant shall prepare all specifications and designs using the metric
system and shall embody the best design criteria applicable to Philippine
conditions. The Consultant shall specify standards which are accepted and well-
known among industrial nations.

46.2 The Consultant shall ensure that the specifications and designs and all
documentation relating to procurement of goods and services for this Contract
are prepared on an impartial basis so as to promote national and international
competitive bidding.

47. Reports

The Consultant shall submit to the Procuring Entity the reports, deliverables and
documents in English, in the form, in the numbers, and within the time periods set forth
in Appendix II.

48. Assistance by the Procuring Entity on Government Requirements

48.1 The Procuring Entity may assist the Consultant, Subconsultants, and Personnel
in the payment of such taxes, duties, fees and other impositions as may be levied
under the Applicable Law by providing information on the preparation of
necessary documents for payment thereof.

48.2 The Procuring Entity shall use its best efforts to ensure that the Government
shall:

(a) provide the Consultant, Subconsultants, and Personnel with work

permits and such other documents as shall be necessary to enable the
Consultant, Subconsultants, or Personnel to perform the Services;

(b) arrange for the foreign Personnel and, if appropriate, their eligible
dependents to be provided promptly with all necessary entry and exit
visas, residence permits, and any other documents required for their stay
in the Philippines for the duration of the Contract;
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(c) facilitate prompt clearance through customs of any property required for
the Services and of the necessary personal effects of the foreign
Personnel and their eligible dependents;

(d) issue to officials, agents and representatives of the Government all such
instructions as may be necessary or appropriate for the prompt and
effective implementation of the Services; and

(e) grant to foreign Consultant, any foreign Subconsultant and the Personnel
of either of them the privilege, pursuant to the Applicable Law, of
bringing into the Government’s country reasonable amounts of foreign
currency for purposes of the Services or for the personal use of the
foreign Personnel and their dependents.

49. Access to Land

The Procuring Entity warrants that the Consultant shall have, free of charge, unimpeded
access to all lands in the Philippines in respect of which access is required for the
performance of the Services. The Procuring Entity shall be responsible for any damage
to such land or any property thereon resulting from such access and shall indemnify the
Consultant and each of the Personnel in respect of liability for any such damage, unless
such damage is caused by the default or negligence of the Consultant or any
Subconsultant or the Personnel of either of them.

50. Subcontract

50.1 Subcontracting of any portion of the Consulting Services, if allowed in the BDS,
does not relieve the Consultant of any liability or obligation under this Contract.
The Consultant will be responsible for the acts, defaults, and negligence of any
subconsultant, its agents, servants or workmen as fully as if these were the
Consultant’s own acts, defaults, or negligence, or those of its agents, servants or
workmen.

50.2 Subconsultants disclosed and identified during the bidding may be changed
during the implementation of this Contract, subject to compliance with the
required qualifications and the approval of the Procuring Entity.

51. Accounting, Inspection and Auditing

51.1 The Consultant shall:

(a) keep accurate and systematic accounts and records in respect of

the Services hereunder, in accordance with internationally accepted
accounting principles and in such form and detail as shall clearly identify
all relevant time changes and costs, and the bases thereof;

(b) permit the Procuring Entity or its designated representative and

or the designated representative of the Funding Source at least once for
short-term Contracts, and annually in the case of long-term Contracts,
and up to one year from the expiration or termination of this Contract, to
inspect the same and make copies thereof as well as to have them
audited by auditors appointed by the Procuring Entity; and
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(c) permit the Funding Source to inspect the Consultant’s accounts

and records relating to the performance of the Consultant and to have
them audited by auditors approved by the Funding Source, if so required.

51.2 The basic purpose of this audit is to verify payments under this Contract and, in
this process, to also verify representations made by the Consultant in relation to
this Contract. The Consultant shall cooperate with and assist the Procuring
Entity and its authorized representatives in making such audit. In the event the
audit discloses that the Consultant has overcharged the Procuring Entity, the
Consultant shall immediately reimburse the Procuring Entity an amount
equivalent to the amount overpaid. If overpayment is a result of the Consultant
having been engaged in what the Procuring Entity (or, as the case may be, the
Funding Source) determines to constitute corrupt, fraudulent, or coercive
practices, as defined in GCC Clause 27(e) and under the Applicable Law, the
Procuring Entity shall, unless the Procuring Entity decides otherwise, terminate
this Contract.

51.3 The determination that the Consultant has engaged in corrupt, fraudulent,
coercive practices shall result in the Procuring Entity and/or the Funding Source
seeking the imposition of the maximum administrative, civil and criminal
penalties up to and in including imprisonment.

52. Contract Cost

52.1 Except as may be otherwise agreed under GCC Clause 10, payments under this
Contract shall not exceed the ceiling specified in the SCC. The Consultant shall
notify the Procuring Entity as soon as cumulative charges incurred for the
Services have reached eighty percent (80%) of this ceiling.

52.2 Unless otherwise specified in the SCC, the cost of the Services shall be payable in
Philippine Pesos and shall be set forth in the Appendix IV attached to this
Contract.

53. Remuneration and Reimbursable Expenditures

53.1 Payments of Services do not relieve the Consultant of any obligation hereunder.

53.2 Remuneration for the Personnel shall be determined on the basis of time actually
spent by such Personnel in the performance of the Services including other
additional factors indicated in the SCC after the date determined in accordance
with GCC Clause 22, or such other date as the Parties shall agree in writing,
including time for necessary travel via the most direct route, at the rates referred
to, and subject to such additional provisions as are set forth, in the SCC.

53.3 Remuneration for periods of less than one month shall be calculated on an
hourly basis for time spent in home office (the total of 176 hours per month shall
apply) and on a calendar-day basis for time spent away from home office (1 day
being equivalent to 1/30th of a month).

53.4 Reimbursable expenditures actually and reasonably incurred by the Consultants

in the performance of the Services are provided in the SCC.

53.5 Billings and payments in respect of the Services shall be made as follows:
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(a) The Procuring Entity shall cause to be paid to the Consultant an advance
payment as specified in the SCC, and as otherwise set forth below. The
advance payment shall be due after the Consultant provides an
irrevocable standby letter of credit in favor of the Procuring Entity issued
by an entity acceptable to the Procuring Entity in accordance with the
requirements provided in the SCC.

(b) As soon as practicable and not later than fifteen (15) days after the end of
each calendar month during the period of the Services, the Consultant
shall submit to the Procuring Entity, in duplicate, itemized statements,
accompanied by copies of receipted invoices, vouchers and other
appropriate supporting materials, of the amounts payable pursuant to
GCC Clauses 52.1 and 53 for such month. Separate monthly statements
shall be submitted in respect of amounts payable in foreign currency and
in local currency. Each separate monthly statement shall distinguish that
portion of the total eligible costs which pertains to remuneration from
that portion which pertains to reimbursable expenditures.

(c) The Procuring Entity shall cause the payment of the Consultant’s
monthly statements within sixty (60) days after the receipt by the
Procuring Entity of such statements with supporting documents. Only
such portion of a monthly statement that is not satisfactorily supported
may be withheld from payment. Should any discrepancy be found to
exist between actual payment and costs authorized to be incurred by the
Consultant, the Procuring Entity may add or subtract the difference from
any subsequent payments. Interest shall be paid for delayed payments
following the rate provided in the SCC.

54. Final Payment

54.1 The final payment shall be made only after the final report and a final statement,
identified as such, shall have been submitted by the Consultant and approved as
satisfactory by the Procuring Entity. The Services shall be deemed completed
and finally accepted by the Procuring Entity and the final report and final
statement shall be deemed approved by the Procuring Entity as satisfactory
ninety (90) calendar days after receipt of the final report and final statement by
the Procuring Entity unless the Procuring Entity, within such ninety (90)-day
period, gives written notice to the Consultant specifying in detail deficiencies in
the Services, the final report or final statement. The Consultant shall thereupon
promptly make any necessary corrections within a maximum period of ninety
(90) calendar days, and upon completion of such corrections, the foregoing
process shall be repeated.

54.2 Any amount which the Procuring Entity has paid or caused to be paid in
accordance with this clause in excess of the amounts actually payable in
accordance with the provisions of this Contract shall be reimbursed by the
Consultant to the Procuring Entity within thirty (30) days after receipt by the
Consultant of notice thereof. Any such claim by the Procuring Entity for
reimbursement must be made within twelve (12) calendar months after receipt
by the Procuring Entity of a final report and a final statement approved by the
Procuring Entity in accordance with the above.

55. Lump Sum Contracts

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55.1 For Lump Sum Contracts when applicable, notwithstanding the terms of GCC
Clauses 10, 18.1, 31(c), 41.3, 53.2, 53.3, 53.4, 53.5, and 54.1, the provisions
contained hereunder shall apply.

55.2 Personnel - Any replacement approved by the Procuring Entity in accordance

with ITB Clause 27.3 shall be provided by the Consultant at no additional cost.

55.3 Staffing Schedule - Should the rate of progress of the Services, or any part hereof,
be at any time in the opinion of the Procuring Entity too slow to ensure that the
Services are completed in accordance with the Staffing Schedule, the Procuring
Entity shall so notify the Consultant in writing and the Consultant shall at its sole
cost and expense, thereupon take such steps as necessary, subject to the
Procuring Entity’s approval, or as reasonably required by the Procuring Entity, to
expedite progress so as to ensure that the Services are completed in accordance
with the Staffing Schedule.

55.4 Final payment pursuant to the Payment Schedule in Appendices IV and V shall be
made by the Procuring Entity after the final report has been submitted by the
Consultant and approved by the Procuring Entity.

55.5 Termination - Upon the receipt or giving of any notice referred to in GCC Clause
29 and if the Consultant is not in default under this Contract and has partly or
substantially performed its obligation under this Contract up to the date of
termination and has taken immediate steps to bring the Services to a close in
prompt and orderly manner, there shall be an equitable reduction in the
maximum amount payable under this Contract to reflect the reduction in the
Services, provided that in no event shall the Consultant receive less than his
actual costs up to the effective date of the termination, plus a reasonable
allowance for overhead and profit.

55.6 Unless otherwise provided in the SCC, no additional payment for variation order,
if any, shall be allowed for this Contract.

56. Liquidated Damages for Delay

If the Consultant fails to deliver any or all of the Services within the period(s) specified
in this Contract, the Procuring Entity shall, without prejudice to its other remedies under
this Contract and under the Applicable Law, deduct from the contract price, as liquidated
damages, a sum equivalent to one-tenth of one percent of the price of the unperformed
portion of the Services for each day of delay based on the approved contract schedule up
to a maximum deduction of ten percent (10%) of the contract price. Once the maximum
is reached, the Procuring Entity may consider termination of this Contract pursuant to
GCC Clause 27.